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Revenue increase drives net profit up 163.2% at VICI Properties in H1


VICI Properties, the real estate investment trust spun off from Caesars Entertainment in 2017, has reported a year-on-year increase in revenue and net profit during the first half of its 2021 financial year.

Revenue for the six months to June 30 amounted to $750.7m, up 46.4% from $512.9m in the same period last year.

VICI’s performance in the first half of 2020 was impacted by the enforced closure of casino properties as a result of the novel coronavirus (Covid-19) pandemic. Casinos in the US closed in mid-March last year as states sought to slow the spread of the virus.

This year, casinos were able to operate – albeit with some restrictions – throughout the half, and this was reflected in VICI’s performance.

Revenue from sales-type and direct financing leases in H1 climbed 29.7% to $581.3m, while revenue from lease financing receivables and loans rocketed 385.8% to $140.4m. Revenue from VICI’s golf operations increased 30.2% to $15.1m, while other revenue hit $14.0m.

VICI own a total of 28 gaming properties throughout the US, including Caesars Palace and Harrah’s Las Vegas in Nevada, as well as the Caesars and Harrah’s sites in Atlantic City, New Jersey, and the Greektown Casino-Hotel in Detroit, Michigan.

Turning to costs, operating expenses in the half were slashed by 85.4% to $17.0m as VICI saw its allowance for credit losses significantly lowered. Such an allowance is an estimate of debt a business does not expect to recover.

As such, adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was up 32.5% to $653.1m. After accounting for $156.9m in other costs, the majority of which were interest expenses, profit before tax stood at $576.0m, up 174.3% year-on-year.

VICI paid $1.7m in income tax, meaning it ended the half with a net profit of $575.2m, up by 174.4%. When including $4.7m in losses attributed to non-controlling interests, this left an overall profit of $570.5m, up 163.2% year-on-year.

Turning to the second quarter and revenue for the three months through to the end of June reached $376.4m, an increase of 46.0%.

Revenue from sales-type and direct financing leases in H1 hiked 30.5% to $291.1m, while revenue from lease financing receivables and loans jumped 311.8% to $70.0m, revenue from golf operations increased 56.6% to $8,3m, and other revenue 853.2% to $7.0m.

Operating expenses were down 84.8% to $7.7m, again due to a drop in allowance for credit losses, while after including $79.8m in interest costs, profit before tax hit $304.3m, up 31.2% year-on-year.

VICI paid $1.3m in tax, leaving a net profit of $303.1m, an increase of 30.9%. After taking into account $2.4m in non-controlling interest losses, the business ended the quarter with a total profit of $300.7m, up 292.1% on last year.

“Our stellar second quarter 2021 financial results, supported by revenue growth of 45.9% year-over-year, highlight the value we’ve created on behalf of shareholders by growing our portfolio accretively and partnering with best-in-class tenants,” VICI chief executive Edward Pitoniak said.

“Earlier in July, we announced a strategic partnership arrangement with Great Wolf Resorts, which is a result of our work sourcing unique opportunities that align with our experiential strategy and focus.

“Additionally, we continue to work diligently toward closing our pending acquisition of the real estate of the Venetian Resort Las Vegas and Sands Expo and Convention Center.”